The Parliamentary Standing Committee on Industry has recommended that the government formulate a consistent and stable national policy on electric mobility to create a promising environment for the electric vehicle (EV) industry to thrive.

The committee thinks that frequent changes in the policies relating to EVs create uncertainties in the market and the EV industry. It also creates doubt in the minds of end users about the government’s actions.

Four-wheelers

In a recent report, the standing committee observed that the government’s original goal was to support 55,000 electric 4-wheelers under FAME-II. However, the targets have been reduced to supporting 11,000 electric 4-wheelers with subsidies. Even though electric 2-wheelers are more common, 4-wheelers play a significant role in the country’s automotive sector.

It recommended that the Ministry of Heavy Industries increase support for electric 4-wheelers, including private ones, under FAME II. This support should be based on the vehicle’s cost and battery capacity.

Two-wheelers

The committee acknowledged that the reduction in subsidies for electric 2-wheelers had harmed their sales. It recognized that budget constraint was the main reason for reallocating funds and revising targets under the FAME-II Program.

Considering the urgent need to decarbonize the transport sector, the committee recommends that the ministry restore subsidies for electric 2-wheelers and achieve the targets by 2030.

Mass transport

The standing committee suggested the government allocate additional funds to develop a low-carbon mass public transport system.

A secure, dependable, and affordable public transport system would improve air quality in urban areas and decrease the number of private vehicles on the road.

Charging infrastructure

The committee suggests that the ministry should broaden the scope of FAME-II to include incentives for individual investors to set up charging stations to address range anxiety among potential customers.

It suggested supporting women’s self-help groups and cooperative societies to open and manage charging stations.

Considering the importance of EV mobility in reducing the pollution level in the country, the ministry should play a proactive role through BHEL in providing EPC solutions to support EV charging stations, including solar-based EV charging stations.

Every public sector undertaking and government institution may be asked to participate in the installation of charging stations in their premises for the use of the vehicles coming to their premises.

PLI program

The standing committee suggested that the Ministry of Heavy Industries should ensure domestic value addition for the success of the production-linked incentive program in the automobile and auto components sector.

Policy changes and increased financial support were required to enhance manufacturing capabilities for advanced automotive technology products.

The committee said the specific focus should be on establishing dedicated manufacturing hubs and industrial parks to produce batteries, cells, and electric vehicle components.

In October, Union Minister for Power and New & Renewable Energy R K Singh announced that the government is working on a second Production Linked Initiative program that will cut down the cost of battery storage and boost the adoption of EVs in India.

Incentives

The committee said while many states have incorporated measures in their EV policies to bring down the cost of EVs, there is a need for further action to achieve the targeted increase in electric vehicle adoption by 2030.

To accelerate the decarbonization of the automotive sector, the government must consider making EVs mandatory for public transport in cities with high levels of air pollution.

The committee suggested that the Ministry of Power should promote EV charging during solar hours to minimize the load on the electrical system during non-solar hours.

Additionally, the Committee encourages establishing charging stations or points at work locations, office buildings, or premises with minimal parking facilities. This strategy aims to expand the charging network and promote solar hours charging, reducing the strain on the electric system.

Battery swapping

The standing committee is of the view that one of the biggest barriers to the widespread adoption of EVs remains the lack of charging infrastructure and the overall time required to charge such batteries. With a battery swapping system, EV owners will save on the high cost of buying a new set of batteries at periodic intervals as they can simply replace the exhausted batteries for fully charged ones at battery swapping stations.

It wanted the government to conduct a study regarding the feasibility of battery standardization and formulate a stable battery-swapping policy with the highest levels of safety standards that can infuse confidence in consumers’ decision-making.

Recognizing the advantages of lithium-ion batteries, which offer greater durability and relatively high energy and power density, the committee felt the possibility of reducing the goods and services tax on lithium-ion batteries must be explored. This reduction aims to lower the ownership cost of electric vehicles.

In the third quarter of the 2023 fiscal year, the sale of EVs across India touched 371,214 units, which is a 40% year-over-year increase from the corresponding period last year.